Rubber futures price limit may be cut to 4%

The FMC move is aimed at reining in price fluctuation.

The Forward Markets Commission (FMC) is considering to reduce the daily price limit in the natural rubber futures to 4 per cent from the present 9 per cent. In a meeting convened by the FMC on Monday, the Indian Rubber Dealers Federation (IRDF) raised the issue. The federation said the daily fluctuation in futures prices adversely affected the spot market.

Rajiv Agarwal, member, FMC, told the IRDF to submit a detailed report on the daily variation in prices in the pre-futures and the post-futures eras. The commission would study the report and take appropriate decision in this regard, he assured.

The IRDF asked the FMC to provide a 2+2 price limit band, allowing the maximum limit to 4 per cent in a day's trading. The federation also demanded that there should be compulsory registration with the Rubber Board for all the participants in futures trading. The federation argued that according to the Rubber Act, natural rubber was a controlled commodity and hence registration was essential. They also complained about variation in prices in different commodity exchanges. Meanwhile, the Rubber Board will convene a meeting of various players dealing in natural rubber and the three national exchanges on March 28 to sort out various issues pertaining to futures trading of the commodity.